The US Dollar (USD) is likely to trade with a downward bias; the probability of it breaking the significant support at 140.80 is not high, UOB Group FX analysts Quek Ser Leang and Peter Chia note.
Probability of it breaking below 140.80 is not high
24-HOUR VIEW: “We expected USD to trade in a range between 142.40 and 144.00 yesterday. USD then traded in a 142.18/143.71 range, closing on a soft note at 142.43 (-0.53%). Downward momentum is beginning to build, but not enough to suggest the start of a sustained decline. However, as long as 143.30 (minor resistance is at 142.70) is not breached, USD is likely to edge lower, potentially breaking below July’s low of 141.66. The significant support level at 140.80 is unlikely to come under threat.”
1-3 WEEKS VIEW: “We continue to hold the same view as from Monday (09 Sep, spot at 142.65). As highlighted, we expect USD to trade with a downward bias. However, given the tentative buildup in momentum, the probability of USD breaking the significant support level at 140.80 is not high. To maintain the buildup in momentum, USD must not breach the ‘strong resistance’ at 144.00 (no change in level).”